Do Mandatory Auto Insurance Requirements Violate the Right to Privacy?

Does mandatory auto insurance serve any useful purpose? Some people think that mandatory car insurance is a good idea, and it could prevent us from getting into accidents or running into financial hardship. The problem with mandatory insurance, however, is that it can force you into a financial contract with a company before you’re actually sure that you want to get insurance. And if you’re not sure what the price of auto-insurance will be, you’ll be tempted to just drop it.

Suppose you’ve invested in some nice-looking motor vehicle and you plan on riding it occasionally, perhaps once or twice a year. Suppose that when you do injure another person in an accident, you’re covered for some of their medical bills. Suppose that mandatory auto insurance forces you to purchase liability coverage. Does that mean that mandatory auto insurance is blatantly unconstitutional?

There’s good news and bad news when it comes to your rights as a driver in Wisconsin and in New Hampshire. The good news is that you don’t have to worry about any of this at all, thanks to our state’s supreme court. In 1992, the court decided that mandatory auto insurance was a violation of the constitutional rights of drivers. You see, Wisconsin state law mandated that every driver must purchase a minimum amount of liability coverage. The reason for this was to protect the “common good” against risk by ensuring that injured drivers wouldn’t end up owing more money than they’d already paid out.

According to the court, one of the grounds for this constitutionality was that mandatory auto insurance requirements violate the right to “freedom of contract.” This means that you have the lawful right to enter into contracts without being held accountable for those contracts’ consequences. According to Wisconsinites, one way to effectively protect that right is to require all drivers to purchase a certain amount of insurance. If you can prove that a mandatory insurance requirement actually infringes on your freedom of contract, then you might be able to get around the new mandatory health insurance requirements. In short, the state may not mandate health insurance, but it may require automobile insurance.

One of the arguments that insurance companies often make against mandatory insurance requirements is that they will drive up costs for all drivers. In Lonsdorf’s opinion, however, this argument doesn’t hold much water. He said that because insurance rates are regulated by state law, the insurance companies know exactly what rates they’re allowed to charge. In addition, since state law requires that drivers carry at least PIP protection, “there is no way that a company can charge a woman $50 more a year in car insurance than a man for the exact same vehicle.” (HT: Think Progress)

Whether you agree with Lonsdorf or not, at least you know that you’re not alone. As we approach the critical point of the presidential election, there’s been a lot of talk about mandatory auto insurance in Wisconsin and across the country. What do you think? Will your coverage increase as a result?

Author: Trimwell